Franchising and Change

from Wayne Maillet, President, Franchise Specialists.

Consistency is important to develop the brand and allow the customer to have a consistent experience between franchised locations.

A common clause in most franchise agreements states something to the effect that the franchisee must “operate the Franchised Business strictly in accordance with the standards and operating procedures prescribed by the Franchisor from time to time.” As a franchisee you are granted a license to operate the franchisor’s business model and use its brand. It is a license to use, but does not constitute ownership. A franchisee does not buy the name and logo, but simply acquires the right to use it within the guidelines set out in the license agreement and the operation manuals. A strong franchisor will maintain control over the use in order to protect the integrity of the brand.

You are buying a proven business model. Through consistency strong brands are created. The customer comes to learn to expect a certain level of customer service, cleanliness, product offerings, etc. The customer has clear expectations and knows that no matter which location they go to, the offerings will be the same.

But then there are the realities of real life. The world is evolving and changing. Brands have to evolve with it. The standards and operating procedures are becoming more and more flexible. In the book, McDonald’s Behind the Arches, by John Love, he describes a brand evolving over the decades. The early McDonald’s of the 50’s were drive-ins with a limited menu of burgers, fries and a milkshake. Today the drive-in has been replaced with the drive-thru. The McDonald’s menu has evolved to include a much larger selection of choice for the customer and has been extended into offering breakfast. The Filet-O-Fish and Egg McMuffin were created from the creativity of franchisees. The marketing has shifted to an older demographic. The Ronald McDonald clown is no longer found front and center. The children playgrounds have almost disappeared, replaced with more comfortable seating, TV screens and fireplaces. Worldwide, the menu has evolved to cater to different cultures and consumer tastes. In France you can order a glass of wine with your Big Mac, in Germany, a beer. In India McDonald’s does not serve hamburgers but instead chicken and veggie burgers.

While each brand evolves, so does the competition. New competitors are constantly coming into the market. Technology is causing constant change. In franchise agreements terms of communication were once Telex, replaced with fax and now email.

A 39 year old brand, Shefield Group, started in Canada as a tobacconist, its core product being tobacco and smoking accessories. Over time changing demographics and anti-smoking campaigns caused an evolution of the franchise brand to a convenience store model, Shefield Express. It continued to offer smoking products but expanded its offering to include typical convenience store items. Laws in Canada continue to change around smoking. To date, these changes have worked to the advantage of convenience stores. Across Canada many provinces prohibit grocery stores and pharmacies from selling cigarettes, resulting in many of convenience stores seeing an increase in tobacco sales. Convenience stores across Canada have re-merchandised the store to put a bigger focus on smoking accessories and take advantage of this trend. It appears that “what goes around comes around.”

Byron Hildebrand, Director of Operations for the Shefield Group comments on change. “Less than 10 years ago we would see Shefield Express stores across Canada have entire walls displaying newspapers and magazines. With the popularity of the internet, we watched these sales decline and as a result we reallocated the space to other new products. Through our POS system we constantly monitor sales in each of the product categories across Canada and make the necessary changes to capitalize on trends. I am confident that changes will continue.”

Successful franchisors are constantly monitoring trends to ensure that the franchisee is focused on what is current for the times. In reviewing franchise opportunities, be sure to look for those which are adapting to the marketplace and the needs of the consumer. Strong franchisors will allow controlled variations of the system and permit the brand to evolve and develop. It is one of the benefits of franchising, where the combined experiences of the franchisees can suggest improvements to the overall system that will benefit the brand as a whole. The degree of innovation permitted will vary from franchise to franchise with new emerging systems allowing the most creativity. Research the franchise you are looking at to confirm what is permitted and within what framework. Ask questions to assist you in making an informed decision. What changes to the brand have recently been made or are coming? How did they make these decisions? Were franchisees involved? What will be the potential costs to these changes?

A well-conceived franchise system can provide excellent benefits to the franchisee. One of those benefits is a focus on evolving and changing with the times.


Wayne MailletWayne Maillet is President of Franchise Specialists, a franchise consulting firm based out of Vancouver.  Wayne Maillet is a leading Canadian franchise management consultant with over 20 years of practical experience in all aspects of franchise operations.  Prior to consulting Wayne Maillet worked for the corporate offices of such franchise companies as Keg Steakhouse, Uniglobe Travel and Realty World.  Although the industries were different, the principles, challenges and opportunities of franchising were found to be the same. Wayne Maillet is an active member of the Canadian Franchise Association.  Respected within franchise circles, he brings a realistic, practical understanding of business and franchising.  Wayne Maillet has spoken across Canada on how to franchise your business, written several articles and is often quoted as an authority in franchising.

Contact:

Email: wmaillet@franchisespecialists.com

Web: www.franchisespecialists.com

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